Moving into the year 2007, many Americans soon realized the impact and new importance videos have become on the Internet. With the craze surrounding WebPages such as youtube, where new videos and ideas can be diffused throughout the Internet, it is apparent that video technology is going to become even more important in 2007. While such may be exemplified as a rudimentary analysis, because of such advancement in entertainment, there will be tremendous need for more storage for desktops, laptops, and even more mobile devices such as MP3 players who incorporate video technology. As a result, there will be remarkable opportunities for data storage devices such as produced by Western Digital Corporation (WDC) which will ultimately benefit its shareholders.As stated by Yahoo! Finance, Western Digital Corporation is responsible for the “development, manufacture, and sale of hard disk drives worldwide.” In addition, its hard disk drives extends not only to computers in the form of both desktops and laptops but to more unconventional devices such as MP3 players, servers, USB drives, gaming systems, and even karaoke systems. With such a wide selection of available markets, during such a time of prosperity and innovation relative to the video playing field, there is a tremendous opportunity for Western Digital to continue and expand upon production to supply the growing demand of moving film entertainment. What is also intriguing about Western Digital’s operating means is its global presence around the world. Because Western Digital is a worldwide corporation, with liquidity spreading throughout the world, there is tremendous opportunity, with growing markets in China and India and a strong economic presence in already developed nations such as found in Europe, for the continued expansion of internet capabilities throughout these markets. Consequently, there will be continued high demand, especially with such prosperity, for margins and profits to increase dramatically relative to Western Digital’s production means. Both the worldwide independent affluence and a depreciating dollar will have strong, but positive, consequences relative to Western Digital’s financial analysis, and regardless of where the American economy descends or ascends to, Western Digital, if more innovation and expansion is played into its operations, will be a successful company because of its fundamentals.Nevertheless, as I mention the potential for strong fundamentals, it is already apparent that Western Digital, relative to its competitors, provides figures which are extraordinary without future implications. With a 19% revenue growth margin (and a 22 dollar revenue per share ratio) in both of the last two years coupled with a 90% margin growth relative to earnings (EBIT) in 2006 after an already strong 30% earnings growth from 2004 to 2005, it is evident that Western Digital is not only producing at strong numbers as indicated by sales but finding new sources of income at the same time with lower costs of revenue as income from continued operations as found in the income statement had increased nearly 350% in the last fiscal year. Continuing, the strong revenue which has grown at dramatic rates for Western Digital has continued to add a stronger case to label this company as a value stock as unfortunately its share price has not done as well as could have hoped. With an enterprise value to revenue level of 0.84 over the last twelve months and a price to sales ratio of 0.99 over the same period, compared to industry competitor’s EMC’s respective numbers of 2.75 and 2.80 or Network Appliance’s even worse 5.65 and 6.14, it is clear, at least relative to revenue numbers, that Western Digital is undervalued in its industry. While arguments may be made that earnings and income should play more of a significant factor, it is evident that by comparing Western Digital’s forward P/E ratio of 9.41 and its 5 year PEG ratio of 0.94 to EMC’s respective 21.96 and 1.69 or Network Appliance’s 28.16 and 1.23 numbers, Western Digital proves to contest any argument illustrating that this company is not undervalued. In addition, Western Digital has a strong asset to liability percentage as illustrated by the current ratio of 1.7 and an enterprise value lower than its market value.While such may not look that appealing when utilizing the adjusted price value model when the DTS is added in for M&A deals, for the common shareholder, it is much better for a company to have the luxury of being able to cover its liabilities with its assets if liquidation was required which cannot be argued the same for its competitors. In addition, as stated with the growing demand of larger storage capacities to hold the new video requirements, it is clear after looking at Western Digital’s EBITDA, a proxy of cash flow, over the past year that it has the capabilities to fund new capital expenditures to accommodate the growing changes illustrated by the technology sector. Thus, after examining the fundamentals and growing numbers as illustrated by Western Digital, compared to its rivals, it is completely evident that Western Digital, for one reason or another, is undervalued making it an excellent choice of purchase.After looking at the fundamentals, one may wonder why Western Digital, with a beta of about 3 has only grown about 5.5% over the past 52 weeks while the S&P has grown nearly 10% during the same time. Others may also wonder why Deutsche Bank recently downgraded the stock from a buy to a hold. Truth be told, with a slowing economy in the United States, many are wondering if the percentage of revenue and sales accrued from America will hamper corporate earnings in the next year. However, after stating how the video explosion will continue to grow on the Internet and how foreign markets are eager to purchase hard disk drives for the growing demand in their respective countries, coupled with the fact that Western Digital has phenomenal fundamentals relative to its peers and its share price, I cannot find a reason to solidify the purpose of not purchasing shares of this stock.While technical analysis is not favored to many Wall Street analysts, the share price of Western Digital has grown over five percent over the past year, over 100% over the past two years, and nearly 300% over the past five years. It’s true that 2006 has not been favorable to Western Digital as it has to other industry leaders and companies, but such should only solidify the argument that Western Digital is cheap compared to all other corporations. With most other industries peaking at their 52 week highs, ready for a negative correction if the economy falters, Western Digital, relative to its earnings, still has not met such status, but has the required fundamentals to due so. Looking more closely at the simple moving average (SMA) of 100 days of a one year chart, it seems that over the past few months, Western Digital has hit a support level of about 17 and is on a small upward climb on relatively high volume. Such should be a good indicator of how this company will perform, with all the other positive factors associated, in 2007.Thus, after examining what this company does and its global presence, its fundamentals, and its technical upside, all the factors lead me to believe that this company is incredibly undervalued to both its industry and the rest of the market. It’s true that 2006 was not the greatest year for this company, despite having positive returns of equity over 52 weeks, but 2007, with the continued growing demand of its products around the world, will lead the argument of having Western Digital, because of its cheap price, producing numbers that will not only amaze its shareholders but bump this company to possible historical highs.